Aehr Test Systems (NASDAQ: AEHR), a key player in the Semiconductor Equipment & Materials industry, has recently seen a dip in its stock price. This has raised questions among investors about whether this is a buying opportunity or a sign of underlying weakness. The company's
fundamentals present a mixed picture. On one hand, Aehr Test Systems has a robust enterprise value of $283M and a trailing PE of 15.97, suggesting a relatively undervalued stock. On the other hand, the company's price to book ratio stands at 3.75X, which is higher than the industry average, indicating a potentially overvalued stock. The company's
financial health also presents a mixed picture. While Aehr Test Systems has a healthy working capital of $72.72M and gross profit of $32.7M, it also has significant liabilities. The total current liabilities stand at $16.3M, including capital lease obligations of $6.3M and other current liabilities of $4.1M. The company also has non-current liabilities totaling $6.2M. In terms of cash flow, the company has seen a change to operating activities of $925K and total cash from financing activities of $7.3M. However, it has also seen other cash flows from investing activities amounting to a loss of $17.3M. Given these fundamentals, investors need to weigh the potential upside against the risks before deciding whether the recent dip in Aehr Test Systems' stock price presents a buying opportunity. Currently, Aehr Test's Dividend Payout Ratio remains fairly stable compared to last year. As of 04/09/2024, the Price To Operating Cash Flows Ratio is expected to rise to 86.60, while the Operating Cycle may decrease to 342.84. Significant changes in technical indicators often precede price drops. This article summarizes key fundamentals of Aehr Test. We will assess if Aehr Test shares are reasonably priced as we enter May. This company actively responds to market trends, making Aehr a potential investment consideration for your portfolio.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Aehr Test income statement, its balance sheet, and the statement of cash flows. Potential Aehr Test investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Aehr Test investors may use each financial statement separately, they are all related. The changes in Aehr Test's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Aehr Test's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Aehr Test
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Aehr Test performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Aehr Test shares is the value that is considered the true value of the share. If
the intrinsic value of Aehr is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Aehr Test. Please read more on our
fundamental analysis page.
How effective is Aehr Test in utilizing its assets?
Aehr Test Systems reports assets on its Balance Sheet. It represents the amount of Aehr resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Aehr Test aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Semiconductors & Semiconductor Equipment space. To get a better handle on how balance sheet or income statements item affect Aehr volatility, please check the breakdown of all its
fundamentals.
Are Aehr Test Earnings Expected to grow?
The
future earnings power of Aehr Test involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Aehr Test factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Aehr Test
stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Aehr
expected earnings.
Aehr Test Gross Profit
Aehr Test Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Aehr Test previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Aehr Test Gross Profit growth over the last 10 years. Please check Aehr Test's
gross profit and other
fundamental indicators for more details.
What is the case for Aehr Test Investors
Institutional investor usually refers to an organization that invests money in Aehr Test on behalf of clients or other money managers. Buying and selling of large positions of Aehr Test stock by institutional investors can create supply and demand imbalances that result in sudden price moves of Aehr Test stock. Let's take a look at how the ownership of Aehr is distributed among investors.
Ownership Allocation
Aehr Test holds a total of 28.85 Million
outstanding shares. The majority of Aehr Test Systems
outstanding shares are owned by
other corporate entities. These outside corporations are usually referred to as non-private investors looking to acquire positions in Aehr Test Systems to benefit from reduced commissions. Consequently, institutional investors are subject to a different set of regulations than regular investors in Aehr Test. Please pay attention to any change in the institutional holdings of Aehr Test Systems as this could imply that something significant has changed or is about to change at the company. Please note that no matter how many assets the company secures, if the real value of the firm is less than the current market value, you may not be able to make money on it.
| Retail Investors20.56% | Insiders5.86% | Institutions73.58% |
| Retail Investors | 20.56 |
| Insiders | 5.86 |
| Institutions | 73.58 |
Please be aware that individual investors typically purchase shares for their personal accounts and usually in smaller quantities compared to institutional investors. While they might influence Aehr Test's decisions if they own a significant combined portion of its shares, such influence is relatively rare. Conversely, institutional investors - like mutual funds, pension funds, hedge funds, and other investment companies - often have a substantial sway over Aehr Test's decisions due to their larger holdings.
| 2021 | 2022 | 2023 | 2024 (projected) |
Short Long Term Debt Total | 1.0M | 6.3M | 7.2M | 7.6M | Total Assets | 62.3M | 98.1M | 112.9M | 118.5M |
Asset Utilization
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Aehr Test has an asset utilization ratio of 66.19 percent. This connotes that the Company is making $0.66 for each dollar of assets. An increasing asset utilization means that Aehr Test Systems is more efficient with each dollar of assets it utilizes for everyday operations.
| | | Total Current Assets107.5 M | | | Net Tangible Assets91.3 M |
| Non Current Assets Total | 8.61 Million | 4.13 |
| Non Currrent Assets Other | 69,255 | 0.0332 |
| Other Current Assets | 861,926 | 0.41 |
| Total Current Assets | 107.5 Million | 51.51 |
| Other Assets | 380,534 | 0.18 |
| Intangible Assets | 0.0 | 0.0 |
| Net Tangible Assets | 91.29 Million | 43.74 |
Buy low, sell high is a common investment mantra, and Aehr Test Systems' (NASDAQ: AEHR) recent dip might be a perfect example of this. Despite weak technical indicators, the company's
fundamentals remain strong. With a current ratio of 5.99X, Aehr Test Systems is in a healthy financial position, indicating its ability to cover short-term liabilities. Furthermore, the company has a robust operating income of $13.4M and a net income of $14.56M, suggesting profitability. However, investors should also consider the company's market risk adjusted performance of -0.43 and a probability of bankruptcy at 4.01%. Therefore, while the recent dip might present a buying opportunity, it's crucial to weigh the potential risks.
Over 3 percent spike for Aehr Test. What does it mean for retail investors?
Despite a recent surge of over 3% in Aehr Test Systems' stock, retail investors should tread carefully. The Value At Risk (VAR), a measure of potential loss in investments, has dropped to -6.01, suggesting a possible price decrease ahead. While the price increase may seem appealing, it's crucial for investors to consider this risk measure before investing. Aehr Test Systems has very low volatility, with a skewness of -1.11 and kurtosis of 6.24. Understanding these
market volatility trends can help investors time the market effectively.
High volatility in bear markets can impact
Aehr Test's stock price, causing investor stress as share values fall, often prompting portfolio rebalancing with different financial instruments. In conclusion, Aehr Test Systems stock has shown a strong advance today, however, its future trajectory remains uncertain. The stock's current market valuation stands at
$11.97, but the real value, as per valuation, is
$23.46, indicating potential undervaluation. Analysts have a consensus of 'Hold' with two holds in place, and their target price estimates range from a low of $54.6 to a high of $66.6, offering significant upside potential from the current price. However, investors should exercise caution as there is also a possible downside risk to $7.09. Therefore, while the stock's performance today is encouraging, it is essential to closely monitor the market and company
fundamentals before making an investment decision. .
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Rifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce.
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